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Governments Look to Back Up Ethanol Goals

State and federal governments are pouring millions into research for new ethanol feedstocks.

Jul 31, 2007

Although the current U.S. ethanol supply is 98% corn-based, industry analysts agree that in order for the ethanol industry to meet benchmarks put in place by the White House, Congress, and some states, alternative feedstocks will be needed.

While a 2005 federal energy law already mandated 7.5 billion gallons of ethanol production by 2012, President Bush called for a 20% reduction in gasoline use by 2017 and the Senate passed a bill requiring the use of 36 billion gallons of biofuels by 2022. That bill specifically requires 21 billion gallons from feedstocks other than corn.

While Congress is backing its standards with increased funding for renewable fuels research and development, the administration is taking steps as well. The Department of Energy announced this summer that it will spend $375 million in Tennessee, Wisconsin and California to develop non-food crops into biofuels. The department is already investing another $385 million in six alternative-feedstock ethanol plants in California, Florida, Georgia, Idaho, Iowa and Kansas.

More than 20 states provide tax incentives for ethanol production, ten give tax breaks at the pump for drivers using ethanol, and seven require gasoline at the pump to include a certain percentage of ethanol.

Government incentives have helped bring ethanol production up to a projected more than 5 billion gallons in 2007 - twice the production in 2003.